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Volkswagen of America: Managing IT Priorities
This case is about efforts of Volkswagen of America, the U.S. subsidiary of
Volkswagen AG, to design a process for setting IT funding priorities so that they align
with business priorities and the company's overall strategy. The process is carefully
thought out and executed, but still encounters difficulties.
In my opinion, it is definitely an improvement over the old process which
basically was just a debate among executive sponsors without any formal structure.
This process, in my opinion, is more linked with the overall business strategy and had
a specific project prioritization system but there was a lack of introduction of it among
the company’s business units so they faced a lot of criticism from ELT peers. They
should have explained that NRG or “Next Round of Growth” program had the key
leadership focus in order to prepare for the growth in product offering and associated
sales and service volume.
Currently, the budget is being controlled by VWoA parent company – VWAG
that assigns the total available budget ($ 60 million this year). Further on this budget
was allocated to certain projects by the ITSC that guided and approved the process of
IT project selection and prioritization in conjunction with PMO subsection of BPTO
that administered the IT project-proposal and approval process so that they would be
in line with the company’s business architecture. In my opinion, IT department should
have its own budget because it has a support function and a crucial role for the whole
organization and 1992-2002 was a good example of overall IT importance. In control
of the budget should be the CIO or Uwe Matulovic in this case because he has been
the leader for process development and can look to the projects not just from an IT
but business perspective as well. At the same time he had a successful implementation
of the BPTO department in 2002 after which the current project where executed in
